Thursday, January 6, 2011

What a deal! $6M in property for $260Gs City sells 14 homes to Native social-housing agency

Sold! Fourteen city-owned houses collectively worth over $6 million to a Native social-housing agency for $261,281.
The day before Mayor Rob Ford and Toronto’s new council took office, Toronto Community Housing Corp. quietly transferred the houses to Wigwamen Inc, selling nine well under market value and giving five away essentially for free.
The houses, all left vacant and dilapidated for years — and originally paid for with taxpayer dollars — were sold for whatever was left owing on their mortgages, nine of them sold for an average of $29,000, and five had a mortgage balance of $0.
The 14 houses are among 20 the TCHC is transferring over to Wigwamen after receiving approval from Toronto’s outgoing David Miller-led council back in May.
While the deal was supposed to close on Oct. 29, it was put on hold after Ford, then mayor-elect, met with TCHC officials to question it.
The remaining six houses will be transferred pending land-severance approvals and the relocation of existing tenants, TCHC spokesman Jeff Ferrier said.
And because Wigwamen is a charitable organization it’s exempt from paying property taxes on its houses, said Alex Mozo of the city’s finance and administration department.
Ford spokesman Adrienne Batra said the new mayor and council could do nothing to stop the sale because it was approved by former council.
“Mayor Ford will be working with TCHC to ensure any future sales (are) in the best interest of the taxpayers of Toronto,” Batra said in an e-mail to the Sun.
That’s good, said Kevin Gaudet of the Canadian Taxpayers Federation, because such deals are not in the interest of Toronto taxpayers who were paying for the houses while in the hands of the TCHC.
“They are not selling properties for market value,” he said.
“We can get into any of the complicated questions about whether or not (TCHC) should be replacing houses with apartments or whether they should be in this business at all, but ... when you sell property below market value, you’re losing money,” Gaudet said.
And it gets even worse, he said, adding that if they were sold on the open market — and not to a charitable organization — they would then generate property tax revenue.
But the TCHC’s Ferrier said the deal will save taxpayers money. The TCHC will not have to repair the houses or replace them, as it is obligated to do under provincial social-housing rules.
“For these 20 houses, this is saving taxpayers $3 million, because we had a requirement to replace these houses if we sold them on the open market,” he said.
It’s an explanation he’s heard all too often, Gaudet said.
“There isn’t a government department that doesn’t make an announcement and allege that it is somehow saving money,” he said.
“It’s like selling your houses to your neighbour for $50 and saying ‘Wow, I got a great deal on this’ ... the only incontrovertible area here is a ton of money is being lost.”http://www.torontosun.com/news/torontoandgta/2011/01/06/16792611.html#/news/torontoandgta/2011/01/06/pf-16790076.html